Driving Sales Through Exclusivity Takes Time, Says Brunello Cucinelli
Quiet luxury is the epitome of exclusivity, transcending ostentatious displays of wealth, and that’s a realm Brunello Cucinelli is determined to stay in.
“Exclusivity and rarity will allow a company to last a century. It’s not easy, but this is what we believe in,” said Brunello Cucinelli, executive chairman and creative director of the fashion house, during the company’s earnings call Tuesday (Aug 29).
Throughout the call, Cucinelli restated the concept of exclusivity multiple times, seeing it as a crucial element propelling his eponymous company’s trajectory. The company’s profits and revenues rose during the initial six months of the year.
During the six-month period ending June 30, net profit surged 31.9% year over year (YoY), reaching €66.7 million from €50.6 million.
Revenues similarly increased by 31% YoY to €543.9 million from €415.3 million.
“Overexposure has always worried me as it is not exclusivity, and luxury is exclusivity, rarity and uniqueness, when customers feel that a product was made almost solely for them,” Cucinelli said.
Cucinelli said that despite his company’s sales doubling since the pandemic, it took time to get there, and his aim is to attain a “gracious” annual growth rate of about 12%. Projected revenue growth for 2023 is about 19%.
In July, Cucinelli forecasted that the year would end with a revenue increase from 17% to 19%, departing from the initial estimate of 15%. By December of the previous year, he had anticipated a 12% growth in sales for 2023.
“The first half of this year ended with more than excellent results. We like to think that we are reaping what the brand stands for in its style and in the way of conceiving the balance between work and the relationship with creation,” Cucinelli said during the July earnings call. “Thanks to the strong demand for handcrafted and exclusive products, we continue to have a very positive outlook on the absolute luxury world market.”
Read more: The Jane Birkin Effect: From Hermès to Brunello Cucinelli and the Rise of Quiet Luxury
Taking into account the “excellent” sell-out performance of the spring 2023 collections and the order intake for the men’s spring 2024 collection up until that point, Cucinelli was confident that the company would achieve a 10% revenue growth in 2024.
CEO Luca Lisandroni noted China’s performance, driving a 55.6% increase in revenues across Asia, totaling €152.2 million. This represented 28% of the overall total. He highlighted China’s growing demand for ready-to-wear items. Customers in this segment seek a globally inspired wardrobe, showing brand loyalty. Typically over 40, they also exhibit a higher inclination for discretionary spending.
Japan as another standout market in Asia, Lisandroni said.
European revenues, €202.7 million, rose 22.9%, making up 37.3% of the overall total. This expansion was propelled by strong upscale tourism, primarily from North America.
There was a 23.9% increase in sales across the Americas, to €189 million, 34.7% of the overall revenue.
Lisandroni highlighted the strength of the American segment and the expansion in the U.S. Cucinelli also mentioned that a “the season of great elegance, à la Great Gatsby, is arriving.”
The retail division sales rose 41.6%, €344.6 million, which accounted for 63.4% of the total.
Anticipating 2024, the company plans to open three fresh stores in Toronto, Miami, and Macao, while also extending its footprint in Vienna and Venice.
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